Crest Nicholson shareholders have revolted over director pay packets after the house builder cut profit targets used to determine performance-based bonuses.
The rebellion at Crest came as investors complained that profits targets that trigger generous share awards for top executives were too easy to meet after they were cut for a second year in a row.
Despite around 58% voting again the directors’ remuneration policy on Thursday the house builder said it plans to push ahead with planned share awards as the vote was only advisory.
Crest Nicholson’s chief executive, Stephen Stone, is set to pocket almost £812,000 in share bonus on top of a salary of £541,158, while chief operating officer Patrick Bergin is set to net £562,500, in addition to pay of £375,000.
Executives’ long-term incentive plans are linked to pre-tax profit and return on capital employed. The profit element sparked controversy after Crest twice cut the targets at which awards would be payable.
In a statement Crest Nicholson described the long-term incentive plan as ‘sufficiently stretching’.
“We are disappointed the advisory vote for this year’s remuneration report was not carried.
“We understand from dialogue with shareholders ahead of the AGM that the main area of concern relates to the profit before tax per share targets for the 2017-2019 long-term incentive plan which makes up 50% of the performance condition.
“As stated previously, the board expects the rate of profit growth will remain robust but not at levels seen in recent years due to tough comparators, additional investment in land, examining approaches to offsite manufacture and a new division required to support our stretching annual growth targets of 4,000 new homes and £1.4bn of sales by 2019.
“The PBT Element was agreed by the remuneration committee after taking into account those factors, and taking into account the uncertain economic backdrop and the competitive environment in which the company operates.”
from Construction Enquirer http://www.constructionenquirer.com/2017/03/23/crest-nicholson-shareholders-revolt-over-directors-pay/
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